SoFi to purchase Galileo for $1.2 billion to expand banking tech

Social Finance Inc. agreed to pay $1.2 billion in cash and stock for Galileo Financial Technologies, a startup that creates applications for card issuers and payments platforms.

SoFi already uses Galileo for its cash-management product, and the acquisition will help the company build up its technology for brokerage and investment services, a company representative said Tuesday.

Galileo builds “bank in a box” technology that powers the checking-account services at digital banks including Chime Inc. and Monzo Bank Ltd. The Carson Group was one of the first wealth managers to offer clients digital banking services through the company in May.

Adding Galileo will give SoFi access to technology it didn’t previously own, while extending the reach of its products to other partners in the U.S. and abroad, according to a statement.

“We will partner to build on our companies’ strengths to drive even greater financial-technology innovation,” SoFi Chief Executive Officer Anthony Noto said in the statement.

Galileo’s existing partnerships will continue under the deal, and it will operate as an independent subsidiary of SoFi, according to the company.

The transaction is the latest consolidation in the fintech industry that’s included deals between PayPal Holdings Inc. and Honey Science Corp., Visa Inc. and Plaid Technologies Inc., and TD Ameritrade Holding Corp. and Charles Schwab Corp.